State officials' salaries skim the cream from the top

Well, it is an election year, and there seems to be something of a state budget surplus, or so projections show. Now, if you’ve been around, and have lived through a crisis and a recession or two, you know that January surpluses can disappear faster than forsythia blossoms in spring.

But politicians, including Speaker of the House Jase Bolger, are falling all over themselves to bellow that the billion-dollar surplus is a good excuse to give voters a tax cut. To his credit, Gov. Rick Snyder isn’t one of them. At least today, that is.

Cutting taxes now makes about as much sense as a family using their income tax refund to go to Cancun – if they have a hole in the roof, their car is falling apart, and there is no money to pay their daughter’s college tuition.

We have massive holes in our roads. Education, the chief ingredient for a successful future, is underfunded, and we have other needs. Using some of this money to fully restore the Earned Income Tax Credit for the working poor would make sense and stimulate the economy. But that’s not the kind of tax cut people like Bolger and Macomb County State Sen. Jack Brandenburg are talking about.

What is ironic, however, is that while the governor is being fiscally prudent here, that is anything but the case when it comes to his favorite top employees and even former employees.

Former State Treasurer Andy Dillon resigned more than two months ago, after becoming embroiled in a messy, sordid, and highly publicized divorce and alcohol drama.

At the time, I thought stepping down was the statesman-like thing to do. Now, however, we’ve learned that while they’ve hired a new treasurer, Andy has been kept on the state payroll at the same salary – $174,000 a year. That sounds a lot like the outrageous “severance payments,” top employees in Wayne County used to get for going from one job to another.

Nor is this an isolated instance. Two months ago, we learned that the governor had given huge pay raises to a number of other top treasury officials, especially those who manage pension funds, nearly doubling some of their salaries.

The state’s chief investment officer, a man named Jon Braeutigam, had his pay boosted from $175,000 to $333,000. That’s more than twice Governor Snyder’s salary. Snyder, of course, doesn’t need the money.

Two other top pension officials had their pay nearly doubled; they now get almost a quarter million each. Six others got whopping pay raises of at least 35%.

The Snyder administration justifies this by saying comparable jobs in the private sector pay more. Well, some do. But people aren’t supposed to go into public service to get rich. Besides, they didn’t have to hire Braeutigam away from Goldman Sachs. He has been a career civil servant.

This all comes, by the way, at a time when most state workers are getting 2% raises and have to kick in more for their health care. I’m all for civil servants making a decent living. But working for the treasury shouldn’t entitle you to skim the cream off the top.

Jack Lessenberry is Michigan Radio’s political analyst. Views expressed in the essays by Lessenberry are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.

In his statement, Dillon said his recent divorce "distracted" him from his work:

“It is with mixed emotions that I announce I have tendered my resignation to Governor Snyder. It has become clear to me-- as it likely is to most -- that it is unfair to my family and the residents of Michigan, to allow issues related to my recent divorce and the unfortunate acrimony associated with it to be a continued source of media attention and scrutiny. My family deserves privacy and our residents deserve to know their State Treasurer is not distracted by such issues and events. For these personal and professional reasons, I have determined it is in the best interests of all that I resign."

Dillon was both praised and criticized for his role in ushering the city of Detroit into bankruptcy. In a statement, Governor Rick Snyder praised Dillon for his tireless work and expertise.Dillon's announcement comes one day after he was deposed by union lawyers about Detroit's bankruptcy.

"The decision to seek bankruptcy protection was not an easy one but was determined to be the only remaining way to address Detroit's long-running financial crisis," Dillon said yesterday after the three-hour meeting.

Dillon was appointed by Gov. Rick Snyder in January 2011, after an unsuccessful run for the Democratic nomination in the state’s 2010 gubernatorial election.

Bill Ballenger is with the newsletter Inside Michigan Politics. He says it was a little surprising it took this long for Dillon to step down, but he says he saw no sign that Dillon's personal turmoil was affecting his job performance. "It made it unlikely he could continue to be any kind of an asset," said Ballenger. "On the other hand there hasn't been any criticism of Andy Dillon's performance as state treasurer.